SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the Quarterly Period Ended: September 30, 1996
Commission File Number: 0-20707
COLONIAL REALTY LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Alabama 63-1098468
(State of organization) (IRS Employer
Identification Number)
2101 Sixth Avenue North 35203
Suite 750 (Zip Code)
Birmingham, Alabama
(Address of principal executive offices)
(205) 250-8700
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. YES x NO ___
<PAGE>
COLONIAL REALTY LIMITED PARTNERSHIP
INDEX TO FORM 10-Q
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Condensed Balance Sheets as of
September 30, 1996 and December 31, 1995 .............
Consolidated Condensed Statements of Income
for the Three Months Ended September 30, 1996
and 1995 and for the Nine Months Ended
September 30, 1996 and 1995 ..........................
Consolidated Condensed Statements of Cash
Flows for the Nine Months Ended
September 30, 1996 and 1995 ..........................
Notes to Consolidated Condensed Financial Statements .
Report of Independent Accountants ....................
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ..................
PART II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K .....................
SIGNATURES ..........................................................
EXHIBIT .............................................................
<PAGE>
<TABLE>
COLONIAL REALTY LIMITED PARTNERSHIP
CONSOLIDATED CONDENSED BALANCE SHEETS
--------------------
<CAPTION>
September 30, 1996
(Unaudited) December 31, 1995
-------------- --------------
ASSETS
<S> <C> <C>
Land, buildings, & equipment, net $740,619,547 $624,514,188
Undeveloped land and construction
in progress ...................... 101,320,198 32,640,381
Cash and equivalents ............. 2,430,329 1,584,850
Restricted cash .................. 2,474,257 2,079,796
Accounts receivable, net ......... 2,643,316 2,280,508
Prepaid expenses ................. 5,162,386 3,561,611
Notes receivable ................. 597,206 580,169
Deferred debt and lease costs, net 5,658,132 3,841,814
Investments ...................... 5,094,782 5,363,639
Other assets ..................... 5,538,936 4,849,614
----------- -----------
$871,539,089 $681,296,570
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Notes and mortgages payable ...... $431,542,723 $354,099,770
Accounts payable ................. 11,405,661 11,423,830
Accrued expenses ................. 10,952,720 1,933,068
Tenant deposits .................. 2,778,773 2,401,604
Unearned rent .................... 764,551 843,642
----------- -----------
Total liabilities ............. 457,444,428 370,701,914
----------- -----------
Redeemable units, at redemption value 221,318,948 207,596,087
----------- -----------
Partners' capital, excluding
redeemable units ............... 192,775,713 102,998,569
----------- -----------
$871,539,089 $681,296,570
=========== ===========
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
COLONIAL REALTY LIMITED PARTNERSHIP
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
---------------------
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- ----------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenue:
Rent ...................... $33,697,454 $27,479,569 $93,090,765 $77,885,091
Other ..................... 1,133,632 946,214 3,171,780 2,830,777
---------- ---------- ---------- ----------
Total revenue ................ 34,831,086 28,425,783 96,262,545 80,715,868
---------- ---------- ---------- ----------
Property operating expenses:
General operating expenses 2,557,913 2,322,099 7,099,856 6,187,815
Salaries and benefits ..... 2,321,790 1,931,743 6,449,417 5,440,861
Repairs and maintenance ... 3,629,972 3,225,600 9,777,098 8,090,656
Taxes, licenses,
and insurance ............. 2,840,136 2,530,882 8,374,087 7,103,734
General and administrative .. 1,032,899 1,179,182 2,598,282 3,744,225
Depreciation ................ 5,789,206 4,598,941 5,791,565 13,318,259
Amortization ................ 251,019 583,398 1,241,498 1,684,542
---------- ---------- ---------- ----------
Total operating expenses .. 18,422,935 16,371,847 51,331,803 45,570,092
---------- ---------- ---------- ----------
Income from operations .... 16,408,151 12,053,936 44,930,742 35,145,776
---------- ---------- ---------- ----------
Other income (expense):
Interest expense .......... (6,383,196) (5,706,186) (16,614,047)(18,093,507)
Income from investments ... 137,332 106,209 455,708 357,966
Gains (losses) from sales
of property ............. 730 (496) 15,492 174,954
---------- ---------- ---------- ----------
Total other expense ....... (6,245,134) (5,600,473) (16,142,847)(17,560,587)
---------- ---------- ---------- ----------
Income before
extraordinary item ........ 10,163,017 6,453,463 28,787,895 17,585,189
Extraordinary loss from early
extinguishment of debt .... (9,263) -0- (487,503) -0-
---------- ---------- ---------- ----------
Net income ................ $10,153,754 $6,453,463 $28,300,392 $17,585,189
========== ========== ========== ==========
Net income per unit ......... $0.39 $0.31 $1.11 $0.92
========== ========== ========== ==========
Weighted average units
outstanding ............... 26,080,222 21,106,108 25,575,676 19,193,907
========== ========== ========== ==========
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
COLONIAL REALTY LIMITED PARTNERSHIP
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
-------------------
<CAPTION>
Nine Months Ended
September 30,
------------------------------
1996 1995
--------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income .............................. $ 28,300,392 $ 17,585,189
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization .......... 17,033,063 15,002,801
Provision for doubtful accounts ........ 19,464 116,396
Gains from sales of property ........... (15,492) (174,954)
Income from investments ................ (455,708) (779,159)
Decrease (increase) in:
Restricted cash ........................ (394,461) (1,019,341)
Accounts receivable .................... (331,629) 500,116
Notes receivable ....................... (17,037) (18,656)
Prepaid expenses ....................... (1,420,361) (401,635)
Other assets ........................... (1,257,028) (1,677,314)
Increase (decrease) in:
Accounts payable ....................... 72,684 1,663,795
Accrued expenses ....................... 8,542,236 6,291,734
Other liabilities ...................... 84,306 414,210
------------- -------------
Net Cash Provided by Operating activities: .. 50,160,429 37,503,182
------------- -------------
Cash flows from investing activities:
Property acquisition costs paid ........ (90,054,192) (50,897,503)
Development expenditures ............... (68,015,254) (14,058,919)
Tenant improvements .................... (556,569) (838,085)
Capital expenditures ................... (4,489,591) (1,564,133)
Proceeds from sales of property ........ 6,400 328,237
Distributions from investments ......... 738,359 739,292
Capital contributions to investments ... (13,794) (146,600)
------------- -------------
Net cash used in investing activities ....... (162,384,641) (66,437,711)
------------- -------------
Cash flows from financing activities:
Principal reductions of debt ........... (37,561,430) (18,147,194)
Proceeds from additional borrowings .... 130,040,450 61,520,000
Change in revolving credit balances .... (44,994,368) (64,468,744)
Capital contributions .................. 106,976,322 73,731,007
Capital distributions .................. (38,803,730) (25,196,440)
Payment of mortgage financing cost ..... (2,587,553) (705,985)
------------- -------------
Net cash provided by financing activities ... 113,069,691 26,732,644
------------- -------------
Increase (decrease) in cash and equivalents 845,479 (2,201,885)
Cash and equivalents, beginning of period .. 1,584,850 2,797,767
------------- -------------
Cash and equivalents, end of period ........ $ 2,430,329 $ 595,882
============= =============
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
<PAGE>
COLONIAL REALTY LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED
CONDENSED FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
Note 1 -- Basis of Presentation
The accompanying unaudited consolidated condensed financial statements
have been prepared by management in accordance with generally accepted
accounting principles for interim financial reporting and in conjunction with
the rules and regulations of the Securities and Exchange Commission. In the
opinion of management, all adjustments considered necessary for a fair
presentation have been included. These financial statements should be read in
conjunction with the information included in the Company's General Form for
Registration of Securities as filed with the Securities and Exchange Commission
on Form 10 on July 6, 1996. The December 31, 1995 balance sheet data presented
herein was derived from audited financial statements but does not include all
disclosures required by generally accepted accounting principles.
Note 2 -- Acquisitions
On September 13, 1996, the Company acquired a multifamily community
located in Macon, Georgia at a purchase price of $9.45 million. The purchase of
this property was completed through an advance on the Company's line of credit.
On October 2, 1996, the Company acquired a 209,000 square foot shopping
center located in Orlando, Florida, for a purchase price of $18.1 million. The
purchase of the shopping center was financed through an advance on the Company's
line of credit.
On October 18, 1996, the Company acquired a 158,000 square foot shopping
center located in St. Petersburg, Florida for a purchase price of $11.8 million,
which was funded through an advance on the Company's line of credit.
On October 18, 1996, the Company acquired a 222,000 square foot shopping
center located in Orlando, Florida for a purchase price of $17.2 million. In the
acquisition of this property, the Company assumed an existing mortgage of $10.4
million that matures in October 2001 and bears an interest rate of 8.8%. The
remainder of the purchase price was financed through an advance on the Company's
line of credit.
Note 3 -- Distribution
On October 24, 1996, a cash distribution was declared to partners of the
Company in the amount of $0.50 per partnership unit, totaling $13,016,000. The
distribution was made to partners of record as of November 4, 1996 and was paid
on November 12, 1996.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners
Colonial Realty Limited Partnership
We have reviewed the accompanying consolidated balance sheet of Colonial
Realty Limited Partnership as of September 30, 1996, the related consolidated
condensed statements of income for the three-month and nine-month periods ended
September 30, 1996 and 1995, and the related consolidated condensed statements
of cash flows for the nine-month periods ended September 30, 1996 and 1995.
These financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying condensed consolidated financial statements
for them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet as of December 31, 1995, and
the related consolidated statements of operations, shareholders' equity, and
cash flows for the year then ended (not presented herein); and in our report
dated January 25, 1996, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth in
the accompanying consolidated condensed balance sheet as of December 31, 1995,
is fairly stated in all material respects in relation to the consolidated
balance sheet from which it has been derived.
COOPERS & LYBRAND L.L.P.
Birmingham, Alabama
October 21, 1996
<PAGE>
COLONIAL REALTY LIMITED PARTNERSHIP
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
General
The following discussion should be read in conjunction with management's
discussion and analysis of financial condition and results of operations and all
of the other information appearing in the Company's General Form for
Registration of Securities as filed with the Securities and Exchange Commission
on Form 10 on July 6, 1996 and with the financial statements included therein
and the notes thereto.
Results of Operations -- Three Months Ended September 30, 1996 and 1995 Revenue
-- Total revenue increased by $6,405,000, or 22.5%, for thethird quarter
of 1996 when compared to the third quarter of 1995. Of this increase, $5,390,000
represents revenues generated by properties acquired or developed during 1995
and 1996. The $1,015,000 remainder of the increase in revenues when comparing
the third quarter of 1996 to the third quarter of 1995 represents an increase in
rents charged to tenants.
Operating Expenses -- Operating expenses increased by $2,051,000, or
12.5%, for the third quarter of 1996 when compared to the third quarter of 1995.
Expenses incurred by properties acquired during 1995 and 1996 increased
operating expenses by $2,464,000. Operating expenses also decreased by $250,000
due to the resolution of prior reserves for certain state tax contingencies.
Other Income (Expense) -- Interest expense increased by $677,000, or
11.9%, for the third quarter of 1996 when compared to the third quarter of 1995.
Interest expense increased $1,591,000 due to the increase in indebtedness which
was incurred to finance acquisition and development activity, net of
indebtedness which was repaid through a portion of the Company's equity offering
proceeds in January 1996. Interest expense also decreased by $914,000 due to the
capitalization of $1,171,000 in interest on construction expenditures during the
third quarter of 1996 compared to $257,000 capitalized during the third quarter
of 1995.
Results of Operations -- Nine Months Ended September 30, 1996 and 1995 Revenue
-- Total revenue increased by $15,547,000, or 19.3%, for the
nine months ended September 30, 1996, when compared to the nine months ended
September 30, 1995. Of this increase, $13,204,000 represents revenues generated
by properties acquired or developed in 1995 and 1996. Revenues also decreased
$508,000 during the first nine months of 1996 when compared to the first nine
months of 1995 due to one-time revenues received from lease cancellations during
the second quarter of 1995. The $2,851,000 remainder of the increase in revenues
when comparing the first nine months of 1996 to the first nine months of 1995
represents an increase in rents charged to tenants.
Operating Expenses -- Operating expenses increased by $5,762,000, or
12.6%, for the nine months ended September 30, 1996 when compared to the nine
months ended September 30, 1995. Expenses incurred by properties acquired during
1995 and 1996 increased operating expenses by $6,053,000. Operating expenses
also decreased by $1,325,000 due to the resolution of prior reserves for certain
state tax contingencies. The $1,034,000 remainder of the increase in operating
expenses when comparing the first nine months of 1996 to the first nine months
of 1995 represents an increase in expenses incurred by existing properties.
Other Income and Expenses -- Interest expense decreased $1,479,000, or
8.2%, for the nine months ended September 30, 1996, when compared to the nine
months ended September 30, 1995. Interest expense increased $639,000 due to the
increase in indebtedness which was incurred to finance acquisition and
development activity, net of indebtedness which was repaid through a portion of
the Company's equity offering proceeds in January 1996. Interest expense also
decreased by $2,118,000 due to the capitalization of $2,589,000 in interest on
construction expenditures during the first nine months of 1996 compared to
$471,000 capitalized during the first nine months of 1995.
<PAGE>
Liquidity and Capital Resources
As of September 30, 1996, the Company had one bank line of credit
providing for total borrowings of $110 million. The line, which is used by the
Company primarily to finance property acquisitions and development, bears
interest at a rate ranging between LIBOR plus 125 to LIBOR plus 175 basis points
and expires in December 1998. The balance outstanding on this line at September
30, 1996 was $33,888,000.
Management intends to replace significant borrowings that may accumulate
under the bank line of credit with funds generated from the sale of additional
equity securities and/or permanent financing, as market conditions permit.
Management believes that these potential sources of funds, along with the
possibility of issuing limited partnership units of Colonial Realty Limited
Partnership in exchange for properties, will provide the Company with the means
to finance additional acquisitions. Management anticipates that its net cash
provided by operations and its existing cash balances will provide the necessary
funds on a short- and long-term basis to cover its operating expenses, interest
expense on outstanding indebtedness, recurring capital expenditures, and
dividends to shareholders in accordance with Internal Revenue Code requirements
applicable to real estate investment trusts.
<PAGE>
COLONIAL REALTY LIMITED PARTNERSHIP
PART II -- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
15. Letter re: Unaudited Interim Financial Information
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned hereunto duly authorized.
COLONIAL REALTY LIMITED PARTNERSHIP
Date: November 14, 1996 /s/ Douglas B. Nunnelley
----------------------------
Douglas B. Nunnelley
Senior Vice President
and Chief Financial Officer
Date: November 14, 1996 /s/ Douglas B. Nunnelley
----------------------------
Douglas B. Nunnelley
Senior Vice President
and Chief Financial Officer
(Duly Authorized Officer
and Principal Financial Officer)
Date: November 14, 1996 /s/ Kenneth E Howell
----------------------------
Kenneth E. Howell
Vice President, Controller,
and Secretary
(Principal Accounting Officer)
<PAGE>
Securities and Exchange Commission
450 Fifth Street, N. W.
Washington, D. C. 20549
Re: Colonial Realty Limited Partnership
(File No. 0-20707)
Registration on Form S-3
We are aware that our report dated October 21, 1996 on our review of interim
financial information of Colonial Realty Limited Partnership for the quarters
ended September 30, 1996 and 1995 and included in the Company's quarterly report
on Form 10-Q for the quarters then ended is incorporated by reference in the
registration statements on Forms S-3 related to the Shelf Registrations filed on
July 5, 1996 and October 18, 1996. Pursuant to Rule 436(c) under the Securities
Act of 1933, this report should not be considered a part of the registration
statement prepared or certified by us within the meaning of Sections 7 and 11 of
that Act.
COOPERS & LYBRAND L.L.P.
Birmingham, Alabama
October 21, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001013844
<NAME> Colonial Realty Limited Partnership
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Sep-30-1996
<EXCHANGE-RATE> 1.000
<CASH> 2,430,329
<SECURITIES> 0
<RECEIVABLES> 3,240,522
<ALLOWANCES> 19,464
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 937,509,904
<DEPRECIATION> 95,570,159
<TOTAL-ASSETS> 871,539,089
<CURRENT-LIABILITIES> 0
<BONDS> 431,542,723
0
0
<COMMON> 192,775,714
<OTHER-SE> 221,318,948
<TOTAL-LIABILITY-AND-EQUITY> 871,539,089
<SALES> 0
<TOTAL-REVENUES> 96,262,545
<CGS> 0
<TOTAL-COSTS> 51,331,803
<OTHER-EXPENSES> 471,200
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,614,047
<INCOME-PRETAX> 28,787,895
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
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<EXTRAORDINARY> 487,503
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<NET-INCOME> 28,300,392
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</TABLE>
